2018 Q2 Dealer profitability
15 August 2018
Total Industry
Dealer profitability, as measured by net profit as a percentage of sales (NP%S), for the second quarter of 2018 was 1.5%. This left the first half of the year at 1.5%, down by 0.7% on the same period in 2017. Despite an increase in gross profit from Fixed Operations, declining Vehicle revenues and falling F&I income meant the average dealer saw a net drop in their profit in the first half of the year.
State-by-State
New South Wales/Australian Capital Territory
The average NSW/ACT dealer NP%S was 1.2% for the period Apr - Jun 2018 which is -0.9% down from the same period in 2017. Falls in New Vehicle gross and F&I income, coupled with increases in Overheads contributed to this decline.
Queensland
The average NP%S in Queensland was 2.3% for Q2 2018, down from 2.9% in Q2 2017. Despite finding savings in their expense base, Queensland dealers were impacted by declines in New Vehicle profitability, F&I and Bonus Income.
South Australia/Northern Territory
The state group of SA/NT returned NP%S of 1.9% for the second quarter of 2018, however this was down -0.7% from the same period in 2017. In addition to seeing declines in F&I and increased expenses, SA/NT dealers also saw a fall in gross profit as their Fixed Operations performance softened.
Victoria/Tasmania
After seeing NP%S of 1.6% in Q1 2018, dealers in Victoria & Tasmania returned NP%S of 1.3% in Q2 2018 - this was -0.3% down on Q2 last year. These dealers saw a more modest fall in F&I income than dealers in other states, but they were still impacted by declines in new and used vehicle profitability.
Western Australia
Dealers in Western Australia experienced the largest fall in NP%S in Q2 2018 - moving from 2.5% in 2017 to 0.8% in 2018. Despite finding savings in their cost base, WA dealers were unable to offset declining revenues and gross profit from their vehicle and F&I operations.
Segments
The dealers in the Volume segment had the highest profitability for Q2 2018 (1.6%), however this was down -1.1% on Q1 2017. The average Prestige segment dealer saw NP%S fall from 2.5% in Q2 2017 to 1.5% in Q1 2018. The dealers in the Luxury segment continue to find the market difficult, with NP%S of 1.4% in Q2 2018 compared to 1.8% in Q2 2017.
Click on the images below to download.
Contacts:
General Information Only
This presentation contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively the “Deloitte Network”) is, by means of this presentation , rendering professional advice or services.
Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this presentation.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte Asia Pacific Limited is a company limited by guarantee and a member firm of DTTL. Members of Deloitte Asia Pacific Limited and their related entities, each of which are separate and independent legal entities, provide services from more than 100 cities across the region, including Auckland, Bangkok, Beijing, Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Osaka, Seoul, Shanghai, Singapore, Sydney, Taipei and Tokyo.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organization”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.
No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities.